Like the middle-aged HR manager in your office, Morgan Stanley analysts have persisted in the delusion that LinkedIn is "good for...something."
But even Gorman's guys can no longer keep up the charade that they understand the value of joining the professional network of someone on a social media platform that isn't Facebook or Twitter or even Tinder. Plus they're looking at the last 6 months of LinkedIn stock performance and seeing this:
So, today Morgan Stanley analyst Brian Nowak decided to just let it all hang out and tell everyone that he has come to the realization that he doesn't even really know what LinkedIn is at this point.
Morgan Stanley analysts are reversing their bullish case for LinkedIn, calling it a "platform at the crossroads of uncertainty."
"With its current product offering, LNKD isn't as likely to be as big of a platform as we previously thought.”
Nowak shifted LinkedIn from "overweight" to "equalweight" and reduced the price target from $190 to $125, signaling pretty strongly that Morgan Stanley is officially not impressed with how LinkedIn plans to make, like, money.
But it's the other thing that Nowak did which might cut even closer to LinkedIn's biggest problem, and maybe the tech sector as a whole.
Now, Morgan Stanley is saying it overestimated LinkedIn's ability to grow its platform and underestimated the investment it would need to grow.
As a result, it's re-categorizing LinkedIn from a SaaS business to an internet company.
So, if Morgan Stanley doesn't think that LinkedIn is "Software as a service" company anymore, and is more comfortable seeing at as "Vanilla internet."
One would have to imagine that there is a potential future in which we also start to admit that we don't know really know what Twitter does, or that Uber really isn't an Ayn Rand-themed transportation tech revolution but a billion-dollar data play enabled by a fleet of sedans.
But until then, we'll just have to watch as the cat that is Wall Street plays with the dead canary in the tech coal mine that is LinkedIn.